AFC receives USD100m credit line from India Exim bank
“The Corporation’s unique access to global capital markets has aided it to drive development, integrate Africa’s economies, and transform lives on the continent. The AFC is one of the few multilateral agencies on the continent that have a stronger credit rating than the sovereign states that created them”.
The Africa Finance Corporation (AFC) has received a USD100million loan from the India Export Import Bank (Exim Bank) to help it finance the development and building of critical infrastructure that are required across Africa’s economies in the wake of the Covid-19 pandemic.
The AFC is a leading infrastructure finance company with a pan-African multilateral focus, established by a consortium of African financial institutions and sovereign African states in 2007. Its goal is to bridge the infrastructure investment gap in Africa through the provision of debt and equity finance, project development, technical and financial advisory services.
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The loan from the India Exim Bank has a tenor period of 10 years, and the funds are expected to be geared at projects that contribute to solving Africa’s infrastructure problem with results that drive the sustainable economic growth that’s urgently required on the continent.
The India Exim Bank was established by the Indian government via an Act of Parliament in 1982 for the purpose of financing, facilitating and promoting India’s foreign trade. It is the sovereign export credit agency in India and has over the years searched for co-financing opportunities on the African continent through credit lines to support infrastructure development.
A statement by Harsha Bangari, Deputy Managing Director of India Exim Bank, the bank “as part of its mandate, will continue to foster a network of alliances and institutional linkages with multilateral agencies like Africa Finance Corporation, who have a strong credit profile and are at the forefront of changing the development landscape in Africa.”
The AFC draws capital from a diverse range of international investors and lenders as part of its strategy to maintain Africa’s second highest investment grade credit ratings.
According to a study by the African Development Bank (AfDB) in 2018, Africa has an infrastructure investment gap which can be bridged via an annual capital expenditure of USD 68–108 billion. According to the AfDB, plugging this financing gap through investments in productive infrastructure would produce national and global spillover effects.
In June 2021, Moody Investor service raised its A3 rating of the Africa Finance Corporation to “stable”. The Corporation’s unique access to global capital markets has aided it to drive development, integrate Africa’s economies, and transform lives on the continent. The AFC is one of the few multilateral agencies on the continent that have a stronger credit rating than the sovereign states that created them.
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According to a statement by AFC’s CEO, Samaila Zubairu, “The Covid-19 pandemic has set back Africa’s growth trajectory and compounded its development challenges. We at AFC, continue to execute our mandate to address Africa’s infrastructure needs, working with leading development partners such as India Exim Bank. These strategic partnerships help mobilise the urgently needed capital to rebuild Africa post-pandemic, with more resilient and sustainable infrastructure across key sectors including renewable energy, transportation and telecommunications.”